Taoiseach puts limit on budget measures

Taoiseach Enda Kenny has said that the Coalition will not spend more than €1.5bn on budget measures, including tax cuts, in October’s budget.

Taoiseach puts limit on budget measures

Speaking at the National Economic Dialogue in Dublin Castle, he said that the Coalition would stick with a commitment — made in the spring — to spend between €1.2bn and €1.5bn.

“Despite a stronger than expected performance in tax receipts and the public finances since then, we remain committed to delivering a budget within these parameters,” he said.

“We are never going back to the ‘when we have it we spend it’ approach to budget management of previous governments.”

Government ministers hosted the first of a two-day conference yesterday, where interest groups, trade unions, and representatives for different sectors laid out their economic proposals.

The Coalition said that the process is not a replica for social partnership but that it wants ideas, not just for the coming budget, but for the economy over the next decade.

Finance Minister Michael Noonan said the Government would need to produce policies that would grow the economy, especially with suggestions by the ESRI that the economy could peak by 2016.

“The opening position is that you create more wealth, then there’s another argument about distributing it,” he said, adding that the Coalition was standing by its plan to spend half the extra funds available in the budget on tax reductions and half on funding the improvement of services.

However, during a special break-off session on the economy, the leader of the largest trade union in the country told the minister that there was a “public appetite” for spending two thirds of that revenue on services and only a third on reducing taxes.

Siptu’s Jack O’Connor also called on the minister to make changes, not just in one budget, but to “cross the electoral cycle” over a number of years.

The question was how could Ireland move from a low pay, low tax, low spending economy to the opposite, Mr O’Connor added.

Employers body Ibec said the budget focus must be on a tax policy that gives incentives for job creation. Deputy president Gerry Collins warned that Britain was “attacking foreign direct investment” into Ireland and “going after our talent”.

Farming representatives said that they had kept the construction sector tipping over during the recession with projects and upgrades to farms, while the Irish Creamery Milk Suppliers Association called for a special farm deposit scheme to be introduced, as exists in Australia.

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